Tecma University

Security and profitable trade: U.S. – Mexico border industry

Since its inception, the Customs-Trade Partnership Against Terrorism, or C-TPAT, certification has had its fair share of critics. Whether you love it or hate, however, it is here to stay, and it will have an effect on shipping and U.S. – Mexico border industry.

Over the last decade, companies operating within the border region have come to understand the philosophy, as well as the fundamental importance of supply chain security. A common language has developed that allows operations teams to discuss the matters at hand. New words and phrases have become commonplace in our daily lives such as GPS, command center, vigilance, best practices and roving patrol just to name a few. The C-TPAT program has been an amazing organizing catalyst for companies ensuring that a just in time manufacturing environment is achievable. All of this would not have been possible without the benefits of certain inputs to the private sector provided by Customs and Border Protection (CBP).

Free and Secure Trade, or FAST, lanes are presently jam packed in the evenings at U.S. Mexico border industry commercial land ports. Those companies that are willing to put forth the effort to become C-TPAT certified can reduce their inspection rates, and, as a result, reduce border transit time for their goods.

There is still one somewhat troubling issue in the looming over the world of U.S. -Mexico border logistics. It has to do with the issue the suspension and/or nullification of companies’ hard fought for and earned certifications. Surprisingly, cause for the revocation of a firm’s C-TPAT certification can be the result of a company’s voluntary efforts to assist the CBP to carry out its duties. Given this possibility corporate executive must weigh the potential risks linked to proactively doing so.

In the post 9-11 world, CBP and its affiliates quickly learned that inspecting the amount of cargo arriving at the borders of the United States in its totality would be a physical impossibility. In order to be able to ensure reasonably safe borders, industry would have to take part in a collaborative effort to more effectively police, protect and secure their merchandise shipments. The effort would have to be a non-disruptive one, and would need to be established in a focused manner within a high risk environment. In order to garner the support of those such companies, Customs and Border Protection would need motivate participation by offering a carrot. That carrot came in the form of Free and Secure Trade (FAST) lanes that expedited shipments by reducing inspection rates of trailers of trusted shippers.

Although at the beginning of the program there was some foreseeable confusion regarding issues such as inspection rates and the rules that would govern the new way of conducting U.S.-Mexico border industry and trade, shippers, manufacturers and carriers began to make efforts at increasing their vigilance in this environment of heightened security consciousness.

Despite the best efforts of the trade community mistakes have and will be made. Companies will be duly sanctioned for their transgressions. Although some feel that, at times, such sanctions can be unreasonably harsh, policy must be adhered to for the initiative to function optimally.

Like the CBP with its C-TPAT program, several other government agencies administer self-reporting programs. The FAA has one such program for pilots and air traffic controllers alike. In 2010 the FAA moved to make it law that air traffic controllers could self-report a particular incident without the fear of punitive action. The result was that tower control the reports rose by 53%. Furthermore, the US armed forces, along with many other nation’s armies, make amnesty boxes available on all bases. They are used by soldiers, sailors and airmen that forget rounds of ammunition in their pockets after range training. Military personnel simply drop the ammunition into a centrally located box at a later time with no fear of punishment. Obviously they have made a mistake but are allowed a correct it in a responsible manner without the fear of suffering negative repercussions.

Critics of these programs argue that acts committed in a no fear environment will result in lax behavior, and that close oversight and punitive action are required to maintain order and discipline. However, what these programs have allowed the organizations that have implemented them to do is to understand the nature of some of the problems that they face. Once understood, safety programs and focused training efforts can be applied to mitigate risk where it is high. Organizations are now able to efficiently deploy valuable human resources to the areas in which they are most needed. Risk assessment matrixes can be drawn up that contain clear and concise statistical data to support operational decision-making.

Currently, if a company that is shipping product from Mexico into the United States discovers a contaminated load, it will, most likely, return the shipment rather than report it to CBP. The reason is clear: The organization has a justifiable fear that it may lose its C-TPAT certification. Carriers have, unfortunately, been the recipients of the vast majority of the punishment for such incidents detected by service canines and inspectors.
As a result of the present state of affairs, businesses often make the conscious decision to not notify CBP of a irregularities with shipments on the Mexican side of the border prior to sending them northbound.

In a high risk environment such as logistics, these decisions are not taken lightly. Narco-terrorism clearly imposes a high level risk on companies and its personnel. Revenue streams, however are of tantamount importance to the daily lives of those working in industry. Hence, there is a need to balance risks with the need to run a profitable business. Additionally, CBP and its associated federal agencies may be losing a golden opportunity to collect tremendous amounts of valuable, and, perhaps, actionable intelligence.

The true value-added take away of allowing for a greater, more open, partnership between law enforcement and the private sector via rational policy would undoubtedly be the achievement of a greater understanding of the risks involved in the movement of goods back and forth across the U.S. – Mexico border. To take the measures to be able to develop a clear and concise picture would be an invaluable step toward optimally achieving fast and secure trade. Best practices would be developed in a focused effort in order to stave off potential risks to shipments and manufacturing elements. Finally, federal agencies could focus their valuable human, and the accompany financial resources in those areas that require the most attention.

Customs and Border Protection has experienced unprecedented growth during the last decade. The organization has facilitated this expansion with tremendous efficiency and a strategic, forward thinking mindset. CBP has developed into a valuable partner for industry as a whole. Industry has learned much that has added benefits to its logistics prowess, and CBP has learned how to positively affect commerce and trade. The next logical step is to increase the level of collaboration between both parties. The C-TPAT program was, and still is, one of the best stepping stones for increased participation. Self-reporting has proven to be a valuable asset for the global trade community. No bad actors desire to self-report or simply wouldn’t last in a system that relies on integrity to be its base. Industry needs a trusted partner just as much as CBP need reliable shippers. In order for the North American continent to reach its true free trade potential, a culture change via policy would be open the door to opportunities for that growth to occur. The only organization with the influence that is necessary to change the current status quo is Customs and Border Protection (CBP).

Remember, interested parties can receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

“The Tecma Group of Companies' services allow me to concentrate on making and selling wood pallets. I have Tecma handle all administrative functions, Mexican Customs, human resources, all permitting, as well as the legal aspects of manufacturing in Mexico. It’s a very good, complementary relationship. They provide me with a project manager, which means I don’t have to deal with a lot of individuals. I deal with one individual, who then deals with experts in all relevant disciplines on my behalf.”

“When we purchased the Dashmat product line, which is the product that we are manufacturing in Ciudad Juarez, we were able to establish a Mexico manufacturing plant with Tecma very quickly. They got us up and running very smoothly under their Mexico Shelter Manufacturing Partnership (MSMP). We like Tecma because it is a stable company that has been around for many years, and looks to be around for many more. Tecma appears to care about our Mexico business' success is very responsive to our needs.”

“Since we started, we have been able to maintain a competitive advantage over many of our competitors that have moved their manufacturing to China by reducing lead times to 4 weeks less than most of our competitors. This has given us the ability to compete on pricing against many of our competitors that have gone to China. We found that in our Juarez staff in Mexico we found a highly-trained workforce with strong background, and the capability to do mannequin manufacturing in Mexico.”

“More than a decade ago, Portage Electric Products Incorporated was faced with the reality that we were going to have to consider manufacturing in another country in order to maintain our competitiveness in the global marketplace. We chose Mexico, as we could be here literally within hours, should the need arise. We chose the Tecma Mexico Shelter Manufacturing Partnership (MSMP) because it provided virtually everything we needed to begin with and support an ongoing Mexico manufacturing operation.”

This quarterly publication will be populated with content that is useful and relevant to readers that are contemplating Mexico investments, have operations already within the Republic, as well as to other individuals that have an interest in Mexico and its manufacturing sector.

Reduce Production Costs 50% or MoreIf are you considering setting up manufacturing in Mexico fill out the form below or call 915-534-4252.

What is Tecma Shelter Service?Your role is to concentrate on manufacturing. Tecma takes care of everything that has to do with Mexico. No more complicated than setting up a new manufacturing operation just across town.

Request Personal ContactComplete the form and you will hear from us shortly.